United States Attorney Preet Bharara is investigating fraud related to the NBPA. (STAN HONDA/AFP/Getty Images)

Federal prosecutors in New York announced Thursday that they are charging Prim Capital founder Joseph Lombardo, a former financial advisor for the National Basketball Players Association, with attempting to defraud the players union of $3 million by allegedly fabricating a contract that bore the false signature of a deceased man.

“As alleged, Joseph Lombardo faked the signature of a dead man as part of manufacturing a multi-million dollar contract out of whole cloth that, had it been enforced, would have caused significant losses for basketball players who entrusted him with their savings," U.S. Attorney Preet Bharara said.

Prosecutors allege that Lombardo, 72, presented a contract during the NBPA's internal investigation that would have paid him more than $3 million over five years. That contract was supposedly signed by Gary Hall, a former NBPA lawyer who died in 2011, but was not presented when Prim Capital was subpoenaed during a Department of Labor investigation in 2012.

In January of 2013, after Prim learned that a law firm’s review of the NBPA was going to be made public in the near future, Prim produced a previously undisclosed contract with the NBPA (the “Purported 2011 Contract”). Prim’s fee under this contract was $602,000 per year for a five-year term, for a total of $3,010,000. The Purported 2011 Contract also contained a provision indicating that it could not be cancelled for any reason by the NBPA. The Purported 2011 Contract was supposedly signed in March 2011 by Lombardo, Gary Hall, the former NBPA General Counsel, and one other NBPA employee.

An investigation revealed that the signature of Hall was not authentic, and that the Purported 2011 Contract was actually created at Prim months after the March 2011 death of Gary Hall. The investigation also revealed that Lombardo arranged for the creation of a signature stamp capable of stamping the signature “Gary A. Hall,” and used the stamp to falsify Hall’s signature months after his death. The investigation further revealed that the signature of the other NBPA employee was forged as well.

Lombardo is charged with attempted wire fraud, attempted mail fraud and obstruction of justice and faces up to 60 years in jail and hundreds of thousands of dollars in fines if convicted on all counts. Another Prim Capital employee, Carolyn Kaufman, is also being charged with obstruction of justice for allegedly providing false testimony during a grand jury investigation.

The NBPA has yet to replace Hunter, who served as executive director since 1996.